Region’s housing, retail, job markets take summer hits

Major automakers like General Motors, air carriers like United Airlines and even coffee king Starbucks in recent weeks announced large-scale job reductions, adding fuel to the recession fire.

The start of summer was also rough on local housing, retail and job markets. 

Housing market takes biggest hit yet

Metro-area home values fell nearly 7 percent in June, the largest monthly drop since the residential real estate market began its slide a year ago.

The average median sale price for homes in Baltimore City and Anne Arundel, Baltimore, Carroll, Harford and Howard counties fell to $270,000 from $290,000, a 6.9 percent decline, according to data released by Realtor-owned Metropolitan Regional Information Systems, Inc.

The previous biggest drop in prices was 5.66 percent in January.

“I think the sellers are realizing they cannot stick to the 2004-2005 pricing that they were basing their sale price on, and they’re going to have to adjust it down some,” said Steve Meszaros, a Realtor with Long and Foster Glen Burnie. “The sellers who are selling their houses are the ones who are bringing their prices down.”

A total of 2,329 units were sold in the metro area in June, down 30 percent from 2007.

Sales volume has been off 30 percent every month since last fall.

But while the market might still be as bad, industry watchers said that by early fall the numbers won’t look so grim. The big drops so far have been in comparison to a unusual high, and once the year-over-year comparisons are made to the slumping market of late 2007, the decreases will abruptly disappear, said Ross Mackesey, sales manager for Coldwell Banker Federal Hill.

Retail sales back down

While U.S. banks, automakers and airlines have in recent months announced large-scale job reductions, the slowdown has yet to cause major retailers to take similar actions.

“I’m wondering when it’s going to happen,” said Tom Saquella, president of the Maryland Retailers Association. “It’s still not a very good retail environment.”

Large retail chains can avoid large layoffs by reducing part-time employee hours and delaying new hires, Saquella said.

“They’ve got a lot more flexibility,” Saquella said.

Maryland’s general fund sales tax receipts decreased about 6 percent in June, as was the case two months ago, Comptroller Peter Franchot said in a monthly memo on state revenues. The slide happened after sales jumped about 3 percent in May.

“It appears that the continuing troubles of the housing market, now coupled with quickly rising prices for food and energy, both of which are generally nontaxable and which represent a sizable share of consumers’ expenditures, are substantially affecting sales tax collections,” Franchot said in the memo. “The sales tax is now notably behind expectations with one full month of monthly collections remaining for fiscal year 2008.”

Regional unemployment hits 4.5 percent

Maryland’s May unemployment rate, originally reported to be 4 percent, was recently revised to 3.8 percent, but it didn’t matter much as the state’s June rate jumped to 4.3 percent.

The state’s rate was last at 4.3 percent in July 2006.

The state added 16,876 jobs in the month, but its unemployed also grew by 14,844 to a yearly high of 130,638, according to the Department of Labor, Licensing & Regulation.

The Baltimore-Washington region’s rate jumped to 4.5 percent in June from 4 percent in May. It’s the region’s highest rate since July 2006, when it was 4.6 percent, according to DLLR.

“The credit crisis, falling home and stock prices, the high cost of imported oil, and the growing trade deficit with China are hammering down demand for U.S.-made goods and services and forcing layoffs in many industries,” said Peter Morici, an economics professor at the University of Maryland. “The economy is entering a period of much slower growth during the second half of 2008.”

acahall@baltimoreexaminer.com

acannarsa@baltimoreexaminer.com